Equilibrium
S3 EPA
Dmarket
Market of bread
Smarket
Price ($)
1
4
3
5
2
6
0
Quantity
6 8 10 1412 2016 18 224
S
D
Equilibriumprice ($4)
Equilibriumquantity
(12)
Equilibrium point
Price
0 Quantity
Price
0 Quantity
S
D
($4) Pe
Qe(12)
($2) P1
Qd(18)
Qs(6)
When the market price (P1) is lower than the equilibrium price (Pe),
the quantity demanded (Qd) will be larger than the quantity supplied (Qs).
Then, there will be a pressure to push the market price upward.
A shortage (or an excess demand) will appear.
Shortage
Price
0 Quantity
S
D
($4) Pe
Qe(12)
($6) P2
Qs(18)
Qd(6)
When the market price (P2) is higher than the equilibrium price (Pe),
the quantity supplied (Qs) will be larger than the quantity demanded (Qd).
Then, there will be a pressure to push the market price downward.
A surplus (or an excess supply) will appear.
Surplus
On 19.9.2014, a lot of buyers of iPhone 6 / 6 Plus lined up outside the Apple Store at IFC.
On that day, the market price of iPhone 6 / 6 Plus …
What is this market situation?
On that day, the market price of iPhone 6 / 6 Plus increased a lot.
S
D
($4) Pe
Qe
(12)
Price
0 Quantity
At equilibrium, the quantity demanded equals to the quantity supplied,
there is no tendency for the price to change.
Total Expenditureor Total Revenue